Merits and Merits of CBN’s Decongestion Policy
James Emejo examines the planned decongestion of the Central Bank of Nigeria (CBN)’s headquarters and concludes that beyond sentiments and politics, the policy has mutual benefits for all
Recently the Central Bank of Nigeria (CBN), through an internal memo, notified all staff of its plan to relocate some of its departments from the head office in Abuja to Lagos State. The bank said the decongestion plan was to optimise the operational environment in the bank and ensure compliance with building safety standards as well as enhance the efficient utilisation of office space.
Specifically, the central bank, in the memo, further explained that the action was necessitated by several factors, including the need to align the bank’s structure with its functions and objectives, redistribute skills to ensure a more even geographical spread of talent.
The apex bank also stressed that the decision is to comply with building regulations as indicated by repeated warnings from the facility manager, and the findings and recommendations of the Committee on Decongestion of the CBN Head Office Building.
Essentially, the plan focuses on optimising the utilisation of other bank’s premises. The proposed decongestion would affect 1,533 staff members who would be moved to other CBN facilities within Abuja, Lagos, and understaffed branches.
The CBN management explained that “Our current occupancy level of 4,233 significantly exceeds the optimal capacity of 2,700 designed for the Head Office building.”
MUTUAL BENEFITS
The bank also assured stakeholders that the implementation of the plan would help to improve the health and safety of all staff; enhance productivity and collaboration; extend the lifespan of the head office building; optimise resources and reduce costs as well as create a more comfortable and enjoyable work environment for everyone.
The apex bank insisted that the overcrowding posed several critical challenges including safety concerns as the headquarters building’s infrastructure was designed for a specific number of occupants, pointing out that exceeding the capacity had raised safety concerns, increased health and accident risks, and hindered efficient emergency evacuation.
The bank argued that the space constraint further reduces efficiency as crowded workspaces are negatively impacting productivity and collaboration, adding that overstretched facilities have led to increased maintenance costs.
The relocation initiative was further necessitated by the need for skill distribution within the institution.
The bank stated: “The concentration of technical skills in the Abuja Head Office has led to a shortage at the branch level. Recognising the importance of diverse and specialised talents across all branches, the reorganisation seeks to redistribute technical skills to ensure that each branch has the necessary expertise for its specific operational needs.”
However, an official of the CBN who spoke on condition of anonymity, stressed that the transfer of some departments to Lagos was for the safety of the members of staff and their increased productivity.
He said: “If a company with over 500 members of staff in its head office normally sends about 200 of them to go and work in other states and return to the head office, it will be more economical for the company and safer for the affected members of staff for the company to relocate them fully to go and work in those states. It will also enhance their productivity.”
RESISTANCE
Nonetheless, the reasons offered by the bank to staff over the decongestion drive had failed to appeal to the ears of the affected staff, partly given that humans are naturally resistant to change -given its initial tendency to cause disruptions.
Some of the staff members, in the departments penciled down for relocation including Banking Supervision; Other Financial Institutions Supervision; Consumer Protection; Payment System Management, and Financial Policy Regulations – immediately resisted the transfer, claiming that it was motivated by sectional bias.
Also, there were unfounded allegations that the federal government planned to relocate the apex bank’s headquarters to Lagos under the guise of decongestion. But the CBN has clarified that only a few departments of the bank were affected by the transfer, stressing that the move was also part of cost-cutting and safety initiatives which is rewarding to both the staff and bank.
Some groups have also picked up the gauntlet, questioning the rationale for the planned relocation.
For instance, the Northern Elders Forum (NEF) faulted the move and expressed worry about the potential negative impact of relocating these essential departments on both the institution itself and the nation as a whole.
The forum argued that the move would further result in increased costs, loss of talent, disruption in operations, reduced coordination, regional economic disparities, impaired economic development in northern Nigeria, and decreased investor confidence in the nation’s economy.
NEF’s spokesperson, Abdul-Azeez Suleiman, said; “It would require significant financial investment as the CBN would need to allocate funds for setting up new offices, purchasing or leasing properties, relocating employees, and other infrastructural requirements. This would strain the CBN’s budget and divert resources away from other essential functions and initiatives.”
Also, the Chief Whip of the Senate, Senator Ali Ndume, warned President Bola Tinubu that the planned relocation of the CBN would have political consequences – a comment which does not represent the position of the upper chamber. However, Ndume was cautioned over the utterance which was deemed inflammable.
ENDORSEMENTS
Nevertheless, the CBN’s relocation programme has received commendations from reputable individuals, especially from the banking sector, who believed the push was purely on a merit basis.
Furthermore, financial analysts who spoke separately to THISDAY on the development agreed that the CBN’s relocation plan was a necessity as well as a move long overdue.
They noted that from an administrative point of view, the relocation will drastically cut down travel expenses for the CBN.
The analysts said the planned relocation of certain departments of CBN to Lagos was both strategic and cost-efficient as the bank has oversight on all Deposit Money Banks and Other Financial Institutions, pointing out that most of the headquarters of these financial institutions are domiciled in Lagos.
They argued that the move was meritorious as the CBN headquarters must not necessarily contain all the departments for it to function.
Wealth Management and Business Development Consultant, Mr. Ibrahim Shelleng, said: “If we are looking at it purely from an administrative point of view, of course, it is a no-brainer.
“Given that the majority of financial institutions are headquartered in Lagos, this will drastically cut down travel expenses for the CBN. Indeed, the departments that are being moved to Lagos are largely units that interface with market operators. Currently, staff in Abuja that go to Lagos for monitoring and evaluation are paid both travel costs and out-of-station allowances, which may even be more than their salaries.”
Shelleng added: “However, there is always a sociopolitical angle in Nigeria, and the CBN Governor’s critics may jump on this as a weapon to suggest that the move may be tribally motivated or as a witch-hunt against his predecessor’s employments. I don’t think that will have any bearing on the governor’s decision but could cause dissent amongst employees.”
Also, Managing Director/Chief Executive, Dignity Finance and Investment Limited, Dr. Chijioke Ekechukwu, said: “The relocation of certain departments of CBN to Lagos is both strategic and cost-efficient. CBN has oversight on all Deposit Money Banks and Other Financial Institutions. Most of the headquarters of these financial institutions are domiciled in Lagos.
“It will therefore, save the CBN a lot of money if the Banking Supervision Directorate moves to Lagos, where the headquarters of the institutions they are supervising are. It saves them constant flight costs, hotel costs, and other ancillary allowances to be paid to staff.
“Lagos is also the commercial nerve centre of our country. Dealing with Letters of Credit for importation and exportation will also be easily done nearer the location of the businesses.”
He said: “Instead of congesting their Abuja headquarters, it is necessary to put into use, the underutilised Lagos office of the CBN. We should, therefore, reduce the politics and orchestration of the said movement and allow CBN to concentrate on their functions.”
On his part, Managing Director/Chief Executive, SD&D Capital Management Limited, Mr. Idakolo Gbolade, pointed out that “the move by the apex banking regulator has its merit in the fact that the CBN Headquarters must not contain all the departments for it to function.
“The move becomes imperative according to the needs assessment. The Department of Banking Supervision for example needs not be in Abuja when 95 per cent of the Headquarters of Commercial banks are in Lagos. The Management team of the CBN has the authority to properly position its departments for effective service.”
He said: “The CBN headquarters used to be in Lagos before it was moved to Abuja so I believe that there will be adequate provision of conducive working environment for the relocated employees. The main appeal to management of the CBN is to ensure that adequate considerations are made for women and nursing mothers in these departments to be relocated. The politicisation of the CBN by the past management team lead to their dismal performance and unimpressive results.
The 14th Emir of Kano, Sanusi Lamido, welcomed the decongestion drive and urged the apex bank not to back down.
In a statement, the former CBN governor said the move was “eminently sensible,” citing the larger infrastructure capacity in the Lagos office.
Sanusi said: “My advice to the governor is to go ahead with his policy. Once the CBN starts bending to political pressure on one thing, it will continue doing so.
“Northern politicians will shout that this is moving from Abuja to Lagos. Abuja is a federal capital, not a northern issue. So long as this is a principled decision the noise should be ignored.”
Similarly, a former Deputy Governor of the CBN, Dr. Kingsley Moghalu, further threw his weight behind the central bank’s move, adding that the Lagos office, inaugurated during his tenure 12 years ago, remained underutilised.
Furthermore, the seeming politicisation of the issue had drawn a response from the presidency to calm frayed nerves.
The presidency in a statement said: “We have noticed how mischief-makers, bent on fueling needless ethnic mistrust, have deliberately misinterpreted the decision of the CBN to relocate its Department of Banking Supervision to Lagos and the directive of the Ministry of Aviation and Aerospace Development that the Federal Airport Authority of Nigeria (FAAN) should relocate its head office back to Lagos.
“We consider it necessary to inform Nigerians that there is no iota of truth in the interpretations given to the directives in some quarters and the unfounded claims and rumours that President Bola Tinubu is planning to relocate the Federal Capital back to Lagos.”